This is important because if the pair continues to drop significantly, these traders will likely get stopped out, margin called or simply close their trade out of frustration in the position. This means they become a future supply of sellers.
Assessing the wave count, the pair is taking on the look that blue circle wave v may become an extended wave. That places targets down near .61.
Check out the published a couple weeks back for 2 other wave relationships that show up down near .61-.63 (Kiwi Support Shelf Break Could Be Signficant)
If we are in the beginning stages of an extended 5th wave, then prices will likely hug the lower purple channel line. A significant move above the upper purple channel line hampers the extended 5th wave interpretation.
Your comments are welcome as this one isn't as clear as EURUSD , EURAUD , or USDJPY . Any other interpretations are appreciated.